An extremist, not a fanatic

October 07, 2014

"The economy"

You've got a Labour party that of course famously refuses to talk about the economy, a leader that failed to even address ther deficit.

Hold on. Labour has been banging on for months about the cost of living crisis. Sure, Miliband "forgot" to talk about the deficit in his conference speech. but the deficit is - of course - not the economy.

The Lib Dems claim they'd fix the economy more fairly than the Tories; they'd eliminate the deficit not just by cutting spending as the Tories promise but by raising taxes on the rich.

In the context she's using the word, she clearly means not "fix the economy" but "fix the deficit".

Now, I had thought that Clegg had merely mis-spoke. But it's unlikely that two people would mis-speak in exactly the same way within hours of each other. I suspect something else is going on - the construction of a hyperreality.

They are trying to equate the deficit with the economy, to give the impression that good economic policy consists not in boosting real wages, cutting unemployment, or addressing the threat of secular stagnation but merely in "fixing the deficit." The fact that Clegg is a politician and Quinn a journalist is, in this context, a distinction without a difference; they are both in the same Bubble pushing the same quack mediamacro.

Worse still, by "fixing the deficit" they mean some type of austerity. But there's a big difference between the two. We could - perhaps - fix the deficit by state-contingent fiscal rules, or by adopting a higher inflation target (or NGDP target) and thus using monetary stimulus to inflate our way out of government debt. However, even these options are outside the Overton window.

Instead, the only economic policy permitted by the Bubble is the fake machismo of "tough choices." Not only are these tough only for other people - mostly the most vulnerable - but they don't even work in their own terms; one lesson we've learned since 2010 is that "tough decisions" to cut the deficit don't actually do so as much as their perpetrators hope. But then, in the Bubble's hyperreality, neither justice nor evidence count for anything.

Comments

It's quite interesting to compare current opinion with that of early 90s where we had a similarly large budget deficit (although that one couldn't be blamed on Labour), which I struggle to remember. See here http://www.bbc.co.uk/news/special/politics97/budget97/background/bud1993_95.shtml
I suppose the fact that the last one couldn't be blamed on Labour meant the Tories kept their heads down a little bit. But I don't remember the budget deficit being a major talking point at the time. It came down pretty quickly.

«the fake machismo of "tough choices." Not only are these tough only for other people - mostly the most vulnerable»

Those are the politics of the situation, after all.

Current politics are based on a coalition of the "deserving, hard working" property owning middle income classes with the property owning high income classes against the "lazy, welfare addicted" working and temp working low income people.

Therefore the media strategy iseca to remind often the property owning middle income classes that the poor live in stunning luxury on benefits and that this causes a state budget deficit that threatens those low interest rates that boost asset prices.

"Essex man" and "Worcester woman" just love that message.

While the media also deliver what their sponsors want to say, they deliver mostly what their readers want to hear, because their readers are effectively only interested in buying mostly-free entertainment.

I’d stop worrying about the Westminster fruitcakes’ obsession with the deficit if I were you. The fashion will soon change. Next year they’ll be vying with each other to see who can burn the most witches, or who promises to build the most pyramids to bury dead members of the royal family in.

Current fads aside, the deficit is an issue because it suggests that the government is spending unwisely. If its spending decisions are beneficial to the economy then the tax base grows and creates the source of the funding, the books balance. ie they would pay for themselves. The deficit represent the shortfal in this equation of merit.

I seem to remember that all of "this" .... the bubble, media involvement (intellectualising an agenda), hammering the deficit and real wages....... was laid out as a neo-liberal "plan" in Le Monde Diplomatique only a few years before the current "crisis" was announced. If I can find a link I will post it.
Using the same tools as Gramsci for an opposite agenda...! It took them a while to catch on, but the result is a waterfall of mis-information once their media friends have bitten the apple.